Jan 13, 2020 - Economy & Business

Unemployment fell to 50-year low in 2019 but wages stagnated

Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

Friday's jobs report missed expectations, but still delivered solid numbers, showing the U.S. economy added well over 100,000 jobs and the unemployment rate remained near a 50-year low.

The big picture: BLS reported that the number of people who were employed part time but would rather be full-time employees declined by 507,000 over the year.

  • The number of people who wanted to find a job and had looked but couldn't and had given up, fell by 310,000 in 2019.
  • The number of discouraged workers fell by 98,000.
  • The U6 unemployment rate, which includes these categories of workers, fell to 6.7% in December, a new cycle low and the lowest in at least a quarter century.
  • Wages for production and nonsupervisory workers rose 3% in December

The other side: The wage increases for production and nonsupervisory workers had hit a decade high of 3.6% in October, showing a glaring deceleration to December.

  • Overall, wages grew 2.9%, which was the lowest level in a year and a half and well below the 2018 average of 3.3%.
  • “It’s easier to get a job than a raise in this economy,” Diane Swonk, chief economist at Grant Thornton, told the New York Times.

Between the lines: The average work week fell to 34.3 hours per week — indicating a lack of demand for labor at what should be a high-demand time of year.

  • DRW Trading rate strategist Lou Brien also points out that the last time the unemployment rate was this low, in 1969, "the annual wage growth for the production and non-supervisory workers was above six percent, more than double the current level."
  • "To say the least, the current level of wages does not suggest stiff competition for workers."

Go deeper:

Go deeper

Historically weak wage growth may be the best we get

Illustration: Aïda Amer/Axios

The U.S. economy added 225,000 new jobs last month and more workers came into the labor force. But data showed wages again failed to rise meaningfully, and there's reason to worry that growth may have peaked at this relatively low level.

What's happening: Average hourly earnings grew by 3.1% over the last 12 months, according to the January jobs report, and have stayed within the narrow range of 2.9% to 3.2% for much of the past year and a half.

U.S. jobs growth may be going to another level

Photo: Jim Young/AFP via Getty Images

The job market looks to be picking up steam and shaking off any hints of the slowdown economists predicted would happen as employers got further away from the boost of the Tax Cuts and Jobs Act of 2017.

What happened: ADP's private payrolls report showed the U.S. added 291,000 jobs in January, beating expectations by a wide margin for the second straight month. It was the report's best monthly gain since May 2015.

Election-year economy "everything Trump could hope for"

Data: Bureau of Labor Statistics. Chart: Axios Visuals

The big headline out of Friday's jobs report "was that employers added 225,000 jobs in January, comfortably more than analysts had expected," N.Y. Times senior economics correspondent Neil Irwin writes.

The big picture: Positive underlying trends drove the unemployment rate up to 3.6% from 3.5%, while the share of adults working or looking for work rose to 63.4% — the highest since mid-2013, the Times writes.